Switzerland looks to ditch ‘high price island’ tag

Swiss shoppers pay 40% to 70% more for items than in neighbouring countries Keystone

The Swiss government says it will ease import duties on a wide range of goods to give consumers a better deal in the traditional “high price island” country. The measures will bring savings for businesses and shoppers worth CHF900 million ($913 million), the Federal Council said on Wednesday. 

Import taxes on industrial goods, such as cars and clothing, will be ditched altogether. Duties on selected agricultural imports, including bananas and other exotic fruit, will be reduced. However tariffs will remain for foodstuffs that are also grown in Switzerland. 

“Many businesses in Switzerland will benefit from cheaper intermediate goods and have less paperwork to complete. This will enable them to produce their own goods more cheaply and so be more competitive on international markets,” the Federal Council said in a statement. 

However, it warned that removing or lowering duties could reduce revenues by “several hundred million francs”. 

In addition, the number of import exceptions to the Cassis de Dijon principle will be pared down. The Cassis de Dijon trade rule recognises European Union goods as being compatible with Swiss regulations, thus reducing friction for EU imports.   

It was introduced in Switzerland in 2010 along with a long list of products that for various reasons were still not deemed compatible with Swiss rules. The decision to ease these restrictions particularly affects household appliances and wood products. Moves to introduce more import-friendly conditions for EU foodstuffs have been underway since earlier this month. 

Swiss consumers have long endured having to pay between 40% and 70% more for items in their shopping basket than neighbouring countries. Companies also complain they are charged more for the same supplies than EU competitors. 

While some observers blame higher wages and infrastructure costs for inflated prices in Switzerland, others point the finger of blame at protectionist import duties and yet others decry foul tactics from foreign suppliers. 

On December 12, the so-called “Fair Price Initiative” was handed in, which “declares war on general importers and foreign suppliers who abuse their power”. It wants voters to support its demand to prosecute foreign suppliers who abuse higher Swiss purchasing power to charge exorbitant prices for their goods. 

In 2004, the government reported that Swiss companies could save CHF65 billion a year if they could access supplies at the same price as eurozone firms. 

On Wednesday, the Federal Council said its new measures would meet the objectives of the initiative. The proposals have been sent for consultation before parliament gets to vote on the final recommendations.

swissinfo.ch and agencies/mga